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In a report published Monday, RBC Capital Markets analyst Mark S. Mahaney downgraded the rating on
AOLAOL from Outperform to Sector Perform, but reiterated the $46.00 price target.
In the report, RBC Capital Markets noted, “Shares of AOL are currently trading within 1% of our $46 Price Target – we thus see the stock's Risk-Reward profile as less compelling. AOL shares have nicely outperformed the market YTD, up 50% vs. the S&P 500, which is up 23%. Given the steady improvement we have tracked with AOL's fundamentals, we believe this outperformance has been fully justified. From current levels, however, with the stock trading at 7X '14 EV/EBITDA and at the high end of its historic range (3.7X to 7.1X since 2011), we don't see room for material upside. Hence the Downgrade.”
AOL closed on Friday at $45.55.
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